Key Interest Rate

[edro]

When the Fed raises the "Interest Rate", what is that?

I know that most home and personal loans follow this rate, but what exactly is it?

Is it the rate that the government gives brokers loans to?

I tried Google...

 

[ITJunkie]

The central bank boosted the federal funds rate, the interest that banks charge each other,

 

[sunzt]

if google fails... try wikipedia

 

[JS80]

This is the rate at which banks lend to other banks.